Mexico Mike...

Religious intensity has no place in the metals sector

Hi Bill!

I do not pay much attention to religion these days. That has nothing to do with my personal beliefs on whether we have a creator. It is more a reflection of my disgust on how so many ideologies have emerged that want to dictate to me the nature of that creator, and then go on to control my behaviour and exactly how I should think. Many religions have gone to the point of taking on a hostile approach to other interpretations and beliefs. Its all too much for me thanks and I tire very quickly of the audacity of the clueless that endeavour to spin the most intricate web.

By the same value system I am also disgusted to see that commentary regarding precious metals has now devolved to the level of a religious debate. It used to be that the discussion was primarily polarized along the lines of whether we should seek leverage to the sector at all. Now we have a whole new cottage industry of high priests that want to convince the investor not only that they can predict the future, but also that the other guys know nothing. All for a price of course...

And the top calling hysteria is out of control. During the last few months the rhetoric has reached new lows. A brigade of top callers shown up to explain exactly why the metals are a bubble, accompanied by their interpretation of chart patterns, historical analysis, and whatever convincing story they could throw in the mix to baffle the market with bullshit. And like any good religion, no form of dissenting opinion is tolerated. Question their logic and the reprisal is immediate and shrill. I have no issue with paid newsletters and self-described experts that want to sell a commentary based on their view of where to park money. Let the buyer beware. But it surely seems to me that things have gone right off the rails and these 'experts' are doing the entire sector a disservice with their spin.

For example consider how many of these clowns have been warning people to move out of silver since it traded at $30. This is amusing because anyone that sold has given up their position in the market plus paid taxes and commissions, and now will have to pay even more money plus a premium to buy back the silver. So those who sold early in this move are either left behind in a bull market, or out of pocket. I have yet to see anyone present a working time machine, and therefore since no one knows the exact future outcome for the metals, see how this business of calling a top takes on a religious flavor? Just saying a top is at hand is not good enough. If they are wrong, they just repeat the same bad advice a bit higher and try again. One must employ a strategy of top-caller-averaging to have a chance with this sort of nonsense. And for what? Is it worth all of this hassle in a secular bull market?

I am more inclined to agree with the quiet rationality of just accepting that this sector is notoriously volatile and that there will be times when the mainstream commentary is flat-out wrong, both to the upside and the downside. I lost track a long time ago of all the flawed analysis presented by experts that stated gold or silver could never trade above some mythical peak price. Rather than try to chase tops and call bottoms, I just prefer to calmly add to my holdings on the dips and ignore all the cult leaders out there that urge me to buy their newsletters and participate in their silly trading games.

Anyone that has been in this sector for more than a few months understands that some of the time you are going to deal with buying a temporary high and have to deal with a correction. It is no fun to get kicked in the balls by a bull, but I suspect it would be even less fun to have sold out and have to watch a market plow higher year after while waiting for a lower entry point that never happens. For those who need religion, they can buy into all that technical crap. I am happy to just sit tight and be right.

Cheers!

MexicoMike